Dreier Jailed Without Bail for Alleged Fraud Targeting Hedge Funds

New York (HedgeCo.Net) – Marc Dreier was denied bail on Thursday after prosecutors estimated the New York attorney swindled more than $380 million out of investors in his elaborate scheme that targeted hedge funds.

Alleging that Dreier fooled “the most sophisticated investors in the world,” prosecutor Jonathan Streeter convinced Judge Douglas Eaton that he may be a flight risk. Streeter emphasized the fact that Dreier has extensive contacts around the world where the money may be hidden. Dreier’s legal team had sought a $10 million bail package with house arrest.

Streeter said the alleged fraud had been in the works since January 2006 and called Dreier a “Houdini of impersonation and false pretenses.”

It was first estimated that Dreier duped about $113 million from investors by selling fake notes tied to a bogus real estate development company based in New York. He then allegedly covered up the scheme by producing false documentation and financial statements. While it was first believed that only a few prominent big-name hedge funds were targeted, new evidence supports the theory that Dreier may have targeted many more funds.

His firm, Dreier LLP, also suddenly had millions missing from its client escrow accounts. According to court papers, Dreier is the only one authorized to make transfers from these accounts. Strangely enough, Dreier transferred $10 million to a personal account from the escrow account via telephone while being held in a Canadian jail last week for criminal impersonation charges.